Employee ownership trust case study

A successful transition to employee share ownership for Richer Sounds

Founded in 1978 by Julian Richer, Richer Sounds, is a UK retailer with 52 stores nationwide. It sells a range of hi-fi, home cinema and TV equipment. RSM was brought in to help on an 18-month project to transition the company from private ownership to an employee share ownership trust.

Overview

Richer Sounds was 100% owned by Julian Richer until May 2019 when the owner and founder passed 60% of his shares into an employee ownership trust. Our People Advisory Services team oversaw the project to ensure a smooth transition.

The trust gave all employees an indirect and long-term stake in the business. Separately, Julian Richer personally gave a £1,000 celebratory bonus to employees for every year they had worked with the company (excluding board directors).

Challenges

Our team was  tasked with overseeing the transition of control and management, which involved corporate restructuring to meet lender requirements, moving from a PLC to a private company, and ensuring there were no media leaks before the announcement. It was also important to Richer Sounds that the business culture was preserved during this transition.

We put together a multi-disciplinary team to manage the project including legal, tax and share scheme specialists from People Advisory Services, and company secretarial support.

Partnering with RSM

“As an advisor to Richer Sounds for circa 40 years, RSM understood the unique, employee-focused culture of the business and helped to build a corporate governance structure that reflected this as a part of the project. RSM truly acted in our best interests at all times. Employee ownership has changed significantly in recent years. Not only was RSM technically skilled and experienced with the implementation of an employee ownership trust, but they were also happy to act as a central resource and sounding board for us and our other third-party advisors.”

Results

We agreed a transition period of 18 months and comfortably met this timeline. Not only was the project completed successfully, but it also received overwhelmingly positive press across major media outlets.

“We made the right choice in instructing RSM to implement our employee share ownership project. The team supported us all the way through the process and added real knowledge, value and insight to both us and our third-party advisors throughout the transition. The service we received was excellent and I would highly recommend Partner, Fiona Bell and her team to others going through the process.” 

- David Robinson, Chairman, Richer Sounds

Employee recruitment, engagement and retention are major HR challenges for middle market employers. In our recent Modern Workforce report, we describe how employers can overcome these key people issues.